ETFs

NikkoAM-ICBCSG China Bond ETF - RMB Class

ISIN: SGXC29409643
Bloomberg Ticker: ZHY SP
SGX Code:
Primary Currency (RMB): ZHY
Secondary Currency (USD): ZHD

Overview

Investment Objective

The investment objective of the Fund is to achieve long term capital growth by replicating the returns of the ChinaBond ICBC 1-10 Year Treasury and Policy Bank Bond Index (the “Index”).

The Fund will offer to investors a Chinese bond investment universe that is increasingly growing in size and foreign participation. It invests in bonds issued by:

  • the Chinese government; and
  • the 3 Chinese policy banks - Agricultural Development Bank of China (ADBC), China Development Bank (CDB), Export-Import Bank of China (CEXIM)

Fund Details

ChinaBond ICBC 1-10 Year Treasury and Policy Bank Bond Index (the “Index”)
24 November 2020
Open-ended Listed Unit Trust traded on Singapore Exchange
1 unit per lot
Nil*
Daily
Singapore Exchange
Industrial and Commercial Bank of China Limited, Singapore Branch
DBS Trustee Limited
PricewaterhouseCoopers LLP (Singapore)
Flow Traders Asia Pte. Ltd., CLSA Singapore Pte. Ltd. and Phillip Securities Pte Ltd.
0.15% p.a.^
0.02% p.a.^
0.30% p.a.#
Primary Currency (RMB): NikkoAM-ICBCSG CNB CNY
Secondary Currency (USD): NikkoAM-ICBCSG CNB US$
Primary Currency (RMB): ZHY
Secondary Currency (USD): ZHD

* Distributions are not guaranteed and are at the absolute discretion of the Manager.

^ Usual brokerage and handling charges to apply. Please refer to the Fund Prospectus for complete information on the Fund, relevant disclosures and fees payable.

# Management Fee and Trustee Fee are included in the calculation of Total Expense Ratio.

Fund NAV

RMB 5.7479 (20 May 2024)
RMB (20 May 2024)
225,169,000
RMB 5.00

About the Index

What is the ChinaBond ICBC 1 – 10 Year Treasury and Policy Bank Bond Index?

The ChinaBond ICBC 1 – 10 Year Treasury and Policy Bank Bond Index is an index which comprises of China government bonds and bonds issued by the 3 Chinese policy banks (Agricultural Development Bank of China, China Development Bank, Export-Import Bank of China) traded on the China Interbank Bond Market.

The 3 policy banks in China are state-owned entities and viewed effectively as quasi-government entities. These banks are responsible for financing economic and trade development and state-invested projects and support government-directed spending functions. The 3 policy banks have the same international credit rating as the Chinese government.

Why this Index?

This Index is part of a series of bond indices which uses pricing data supplied by China Central Depository & Clearing (CCDC) and China Bond Pricing Centre (CBPC). CBPC's ChinaBond valuation is widely recognised as the gold standard in Chinese domestic bond valuation and an important indicator of the onshore RMB bond market.

CBPC is a subsidiary of CCDC, and is the leading pricing and index provider for the world’s second largest fixed income market, with over 90% of the AUM market share of all Chinese institutional investors.

CCDC is a wholly state-owned financial institution established by the State Council of China. As a pillar of China's financial market infrastructure, it provides central registration, depository and settlement services. Since its establishment, under tremendous support of the Chinese regulatory authorities, CCDC started from the centralised depository of China government bond and gradually developed into a Central Securities Depository for various kinds of financial products.

The NikkoAM-ICBCSG China Bond ETF will be the first ETF in the international arena to adopt an index published by CBPC.

Performance

RMB Class Return (%) 3 m 6 m 1 yr 3 yr 5 yr Since Inception
NAV-NAV 1.45 2.50 4.52 3.99 - 4.03
Benchmark 1.47 2.65 4.82 4.30 - 4.35
Source: Nikko Asset Management Asia Limited as of 31 March 2024
Returns are calculated on a NAV-NAV basis and assuming all dividends and distributions are reinvested, if any. Returns for period in excess of 1 year are annualised. Past performance is not indicative of future performance.

Fund Characteristics

0.06 %
Source: Nikko Asset Management Asia Limited as of 31 March 2024.

Holdings

Top 10 Holdings

Holdings Weight
GOVERNMENT OF CHINA 2.68% 21-MAY-2030 1.7 %
GOVERNMENT OF CHINA 2.75% 17-FEB-2032 1.7 %
GOVERNMENT OF CHINA 3.03% 11-MAR-2026 1.7 %
GOVERNMENT OF CHINA 2.85% 04-JUN-2027 1.6 %
CHINA DEVELOPMENT BANK 3.34% 14-JUL-2025 1.5 %
Holdings Weight
GOVERNMENT OF CHINA 3.12% 05-DEC-2026 1.4 %
GOVERNMENT OF CHINA 2.67% 25-MAY-2033 1.4 %
GOVERNMENT OF CHINA 3.02% 22-OCT-2025 1.4 %
GOVERNMENT OF CHINA 2.18% 25-AUG-2025 1.3 %
GOVERNMENT OF CHINA 2.28% 25-NOV-2025 1.3 %
Source: Nikko Asset Management Asia Limited as of 31 March 2024.

Issuer (%)

Source: Nikko Asset Management Asia Limited as of 31 March 2024.
Cash in allocation charts includes cash equivalents.
Percentages of allocation may not add to 100% due to rounding error.

Ways to Invest

All you need to know about ETFs

Exchange Traded Funds have grown in popularity, but what exactly is an ETF? What are some of the benefits of ETFs? What are the different types of ETFs? Watch this video that breaks it down for you in an easy to understand format.

01 - Trade through your stock broker on the Singapore Exchange (SGX) using: Cash

02 - Regular Savings Plan (RSP)

Invest in the ETF on a regular basis with:
(*transaction fees or charges may apply with the respective parties below)

03 - Investing in ETFs using a Regular Savings Plan (RSP)

Subscribe directly to the ETF through any of our participating dealers, subject to minimum unit requirements stated below.

Cash Subscription of New Units

For subscription of new units in the ETF using the cash option, investors need to go through an authorised participating dealer and a minimum of 50,000 units is required.

In-kind Subscription of New Units

For subscription of new units in the ETF using the in-kind option, investors need to go through an authorised participating dealer and a minimum of 20,000,000 units.

FAQs

What is an ETF?

Exchange Traded Funds or “ETFs” are professionally managed investment funds that typically invests in a diversified basket of stocks or bonds that track the performance of a specific index. For example, the Straits Time Index or “STI”[1].

1 The STI tracks the performance of the top 30 companies by market capitalization that are listed on the Singapore Exchange

While most ETFs passively track an index, there are some ETFs that are also actively managed.

Just like stocks, you can trade ETFs on a stock exchange at any point during market hours.

In a nutshell, ETFs offer the best of both worlds, where you have the diversification provided by a fund combined with the tradability of a stock, which can be bought and sold whenever the stock market is open.

For the rest of this FAQ section, unless otherwise specified, the term “ETF” will be used in reference only to passively managed ETFs and not actively managed ones.

Fund FAQs infographic 2023.07.04.png

How does an ETF work?

As ETFs are designed to track a benchmark index and closely replicate the performance of the index, it will hold substantially all its assets in index securities in the same approximate proportion as their weightings within the index. For example, if DBS represents 20% of the STI, an ETF designed to track the STI would aim to hold 20% of the fund’s assets in DBS shares.

How does an etf work.jpg

The ETF then issues units to investors, who can buy and sell these units on the stock exchange. The price of an ETF share is determined by the net asset value (NAV) of the underlying assets it holds.

What are the advantages of investing in ETFs?
  1. ETFs provide diversification. Investing into an ETF helps you diversify instantly compared to simply buying single stocks. Diversification is important for reducing risk.
  2. ETFs are easy to trade, just like a stock. ETFs trade on the exchange thereby giving you flexibility to enter and exit at any time. Which means you can simply buy and sell an ETF via your broker, subject to prevailing trading liquidity and market prices at any time the stock market is open. Typically, ETFs are supported by market makers to facilitate trading liquidity and tighter bid-ask spreads.
  3. ETFs are also transparent. What you see is what you get. Generally, ETFs are transparent, as the underlying investments in the ETF are disclosed and freely available to the public. This may not always be true in a Unit Trust for example, where the portfolio manager can choose not to reveal all the underlying investments in the fund.
  4. ETFs grant easy and convenient access to a wide variety of markets. Investing directly into some markets, usually emerging markets, may not be easily accessible to the general investing public. ETFs however now make it very easy for investors to conveniently access these traditionally difficult to access markets in bite sized chunks.
    A very apt example is Nikko AM’s newest NikkoAM-StraitsTrading MSCI China Electric Vehicles and Future Mobility ETF launched in early 2022, that grants investors direct and simple access to China A-shares.
  5. Lower cost, vs other instruments like Unit Trusts. Unlike Unit Trusts that may have higher upfront sales fees and higher management fees to compensate for an actively managed portfolio run by a professional fund manager, passive ETFs typically have lower management fees as they passively track an index to just deliver market returns with no expectations of outperformance.
  6. “Self-Healing”. Constituents within an index are determined by a methodology set by the index provider. New securities are added into the index when they become relevant, and securities that no longer fit the criteria are removed. This ‘self-healing’ nature of the index ensures that the constituents you are invested into via the ETF continues to stay relevant through time, and in turn means that you are always automatically invested into the securities that best fit the index’s objective.
Are ETFs limited to only investing in stocks?

No, ETFs can represent various asset classes, not just stocks. Other asset classes include (but are not limited to) bonds, REITs, commodities etc.

How do I buy or sell ETF units?

As ETF units are traded on stock exchanges, so you can buy or sell them through a brokerage account, just like you would trade individual stocks during trading hours. You place an order with your broker specifying the number of units you want to buy or sell.

What is the difference between ETFs and Unit Trusts?

ETFs and unit trusts are both investment vehicles, but they differ mainly in 2 ways:

  1. The way they are bought and sold – ETFs can be purchased or sold on a stock exchange the same way that a regular stock can, and its price will fluctuate throughout the day. This is different from unit trusts which only trade once a day after the market closes based on its end-of-day net asset value (NAV) price.
  2. ETFs also tend to have lower expense ratios and offer greater transparency.

Etf unit trust.jpg

Do ETFs pay distributions?

Some ETFs pay distributions, especially those that include dividend-paying stocks or income-generating assets like bonds. Distributions are typically made to ETF unit holders on a periodic basis.

Can I reinvest distributions from an ETF?

Yes, brokers may offer distribution reinvestment plans (DRIPs). With a DRIP, you can automatically reinvest your ETF distributions by purchasing additional units, thereby compounding your investment over time.

Are ETFs suitable for long-term investing?

Yes, ETFs can be suitable for long-term investing. They can offer broad market exposure, diversification, and the potential for steady growth. However, it's important to choose ETFs that align with your investment goals and risk tolerance.

Are ETFs risky investments?

As with any investment, there are risks associated with ETFs. As an ETF takes on the risks of the assets it invests into, its net asset value fluctuates with the valuation of these underlying assets, and there is always a possibility of loss. However, ETFs are generally considered to be lower risk compared to individual stocks due to their diversified nature. Do note a passively managed ETF cannot respond to market movements like an actively-managed fund. For example, portfolio manager of an actively-managed fund can adopt defensive measures like reducing securities holdings during periods of volatility or in the face of impending bear market, but a passive ETF will continue to track its index in its securities holdings.

Please note that while this information provides a general understanding of ETFs, it's always important to do thorough research, consult with a financial advisor, and read the specific prospectus and documentation of any ETF you consider investing in.

Important Information

The funds mentioned are Singapore registered funds approved for sale or purchase in Singapore. By proceeding, you are representing and warranting that you are either resident in Singapore or the applicable laws and regulations of your jurisdiction allow you to access the information.

This document is purely for informational purposes only with no consideration given to the specific investment objective, financial situation and particular needs of any specific person. It should not be relied upon as financial advice. Any securities mentioned herein are for illustration purposes only and should not be construed as a recommendation for investment. You should seek advice from a financial adviser before making any investment. In the event that you choose not to do so, you should consider whether the investment selected is suitable for you. Investments in funds are not deposits in, obligations of, or guaranteed or insured by Nikko Asset Management Asia Limited (“Nikko AM Asia”).

Past performance or any prediction, projection or forecast is not indicative of future performance. The Fund or any underlying fund may use or invest in financial derivative instruments. The value of units and income from them may fall or rise. Investments in the Fund are subject to investment risks, including the possible loss of principal amount invested. You should read the relevant prospectus (including the risk warnings) and product highlights sheet of the Fund, which are available and may be obtained from appointed distributors of Nikko AM Asia or our website (www.nikkoam.com.sg) before deciding whether to invest in the Fund.

The information contained herein may not be copied, reproduced or redistributed without the express consent of Nikko AM Asia. While reasonable care has been taken to ensure the accuracy of the information as at the date of publication, Nikko AM Asia does not give any warranty or representation, either express or implied, and expressly disclaims liability for any errors or omissions. Information may be subject to change without notice. Nikko AM Asia accepts no liability for any loss, indirect or consequential damages, arising from any use of or reliance on this document. This advertisement has not been reviewed by the Monetary Authority of Singapore.

The performance of the ETF’s price on the Singapore Exchange Securities Trading Limited (“SGX-ST”) may be different from the net asset value per unit of the ETF. The ETF may also be suspended or delisted from the SGX-ST.   Listing of the units does not guarantee a liquid market for the units. Investors should note that the ETF differs from a typical unit trust and units may only be created or redeemed directly by a participating dealer in large creation or redemption units.

The Central Provident Fund (“CPF”) Ordinary Account (“OA”) interest rate is the legislated minimum 2.5% per annum, or the 3-month average of major local banks' interest rates, whichever is higher, reviewed quarterly. The interest rate for Special Account (“SA”) is currently 4% per annum or the 12-month average yield of 10-year Singapore Government Securities plus 1%, whichever is higher, reviewed quarterly. Only monies in excess of $20,000 in OA and $40,000 in SA can be invested under the CPF Investment Scheme (“CPFIS”). Please refer to the website of the CPF Board for further information. Investors should note that the applicable interest rates for the CPF accounts and the terms of CPFIS may be varied by the CPF Board from time to time.

The ChinaBond ICBC 1-10 Year Treasury and Policy Bank Bond Index is constructed and calculated by ChinaBond Pricing Center Co., Ltd. All intellectual property rights and other interests in the index value and constituent list belong to ChinaBond Pricing Center Co., Ltd. ChinaBond Pricing Center Co., Ltd. does not make any express or implied warranty on the accuracy, completeness or timeliness of Index-related information, or on the conclusions that the data recipient may reach.

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